Producer Company were set up to help agriculture and farmers to gain access to input, credit, production technology, market etc. as per the Companies Act 1956, A Producer Company is a legally recognized body of farmers to ensure a better standard of living for them. It is formed by ten or more individuals or between two institutions or with a combination of the two. The members should have their business objective as procurement, production, harvesting, grading, pooling, handling, marketing, selling, or export. DialmyCA is a professional firm that helps its clients with online registration of Producer Company at the most affordable prices.
The members of the Producer Company are the farmers and agriculturists they will receive the value for the product or products pooled and supplied as the directors decide. The amount is given out later either in cash or in kind or by allotment of equity shares. The members are eligible to get bonus shares in proportion to the shares held by them. The surplus after provision for payment of limited return and reserves are given out as patronage bonus. Patronage bonus means a payment from the surplus income to the members in proportion to their respective patronage.
As per the Income Tax Act 1961 the agricultural income however in certain cases the exemption may vary as per the agricultural activity carried on. The law does not specify any specific tax benefits, which essentially provides to the producer company by its definition.
The members of the Producer Company are primary producers who need financial support. Thus they can avail credit facility for six months for business-related work. Against security, the members can get a loan for a period not exceeding more than seven years. NABARD provides support and financial assistance to meet the needs of Producer Companies.
The registration cost for the Producer Company is very nominal as India is an agricultural company and the members are a primary producer who is from the low-income group.
It is not mandatory by law to get the Producer Company audited.
The documents or statements to be submitted by a Producer Company is very little and thus it saves enough amount.
9000+ GST 18%
80000+ GST 18%
The formation, working, and regulations of a Producer Company is governed under the provisions of Sections 581 A to 581 ZL of companies Act 1956.
A. Any ten persons or two institutions who are producer can start the Producer Company. Producer implies any person engaged in any activity or connected with primary produce or produce arising from agriculture, animal husbandry, horticulture, floriculture, re-vegetation, bee raising and farming.